How Amazon Tax Exemption Program (ATEP) Works
Some buyers and organizations who shop on Amazon.com qualify for sales tax exemptions. Amazon’s Tax Exemption Program (ATEP) is an option available to sellers using Tax Calculation Service to accept exemptions from buyers who are also enrolled in ATEP. By participating, you will experience automatic handling of buyer exemptions directly through your seller account.
Sellers who do not participate in ATEP or buyers who are otherwise unable to apply their exemptions at the time of purchase may request a refund of taxes from you. Additional information about post-order refund of taxes is available in the Tax Calculation Services Terms.
How do I enroll in ATEP?
Your participation is automatic when you save your Tax Settings, unless you opt-out. See How to Enroll in ATEP for more information. A buyer and seller must both participate for a buyer to use their exemption on your offer.
What is the benefit of participating in ATEP?
Sellers who participate will experience automatic handling of buyer exemptions. Automatic handling includes collection of a buyer exemption document, on a per order basis, storage of the document in our system with access through your seller account Tax Document Library, whenever you need it.
Additionally, buyers searching for products can filter their search results to include or exclude seller offers that accept exemptions. If you choose not to not participate, your offer may not be included in a buyers filtered search.
How does the exemption work?
When a participating buyer is purchasing from a participating seller, and the buyer has an active exemption for the destination of the order, their exemption automatically applies to all items in the order. During checkout, the buyer may remove the exemption from one, many, or all items on the order, if a particular item does not qualify for the exemption.
Exemptions are specific to the taxing jurisdictions that have been set up on the buyer’s account. A buyer who has not enrolled with an exemption for the destination of an order will not be offered an option to apply their exemption at checkout.
How do I identify orders with an exemption and access the exemption document?
To identify an order with a tax exemption, use reporting available in your Tax Document Library. Your Sales Tax Report will populate data in the Buyer_Exemption columns and exemption documents will be available in the Tax-Exemption Certificates tab within 72 hours of order completion. For more information, see the Get Tax-Exemption Certificates page.
Can I access exemption documents for orders shipped to a Marketplace Tax Collection state?
For orders destined to a Marketplace Tax Collection jurisdiction, Amazon is responsible to calculate, collect, and remit sales tax, regardless of the fulfillment type. You will not have access to download customer exemption certificates for tax-exempt orders shipped to jurisdictions where Marketplace Tax Collection laws have been enacted.
Is ATEP participation mandatory?
No. ATEP is an optional service; however, participation may help reduce buyer questions regarding your tax settings or requests for post-order refund of taxes charged on an order. It is the seller’s responsibility to communicate with any buyer to answer any tax setting related questions and process requests for post order refund of taxes on all merchant fulfilled orders.
Can I issue post-order refund of taxes?
Yes. For merchant fulfilled orders, you can issue a refund of taxes calculated on an order at any time. For orders fulfilled by Amazon, you can direct the buyer to Amazon Customer Service or issue a concession refund on the order.
What information does Amazon collect from buyers during enrollment?
The standard information collected from buyers includes the purchasing organization name, type of individual or organization (e.g. government, reseller, charitable organization, etc.); jurisdictions (state and/or local jurisdictions) for which their exemption is applicable and other information, such as signed exemption certificates when applicable.
The exemption types supported by ATEP and the specific information we collect from buyers are available under question “What types of exemptions and information can I expect?” towards the end of this document.
Does Amazon validate buyer exemption information?
Amazon will validate a buyer has provided information necessary for the exemption type being enrolled. Buyers are responsible to provide and maintain valid exemption information and appropriately use their exemption for purchases. Amazon does not validate information supplied during enrollment with any tax authority.
Can a buyer’s ATEP enrollment be retroactive?
No. Both buyer and seller must participate in ATEP at the time of the order for a buyer to apply their exemption to an order. Post-order enrollment in ATEP is not retroactive and will only be available for future orders.
A buyer may request a post-order refund of taxes from a seller or Amazon’s customer service. Our Tax Calculation Services Terms and the answer to “Can I issue post-order refund of taxes?”explains when a tax refund is supported and the party responsible to process the refund.
If Amazon issues a refund of taxes on FBA orders, will I receive an exemption document?
Yes. If you participate in ATEP and a customer seeks a post-order, tax-only refund related to an exemption for products fulfilled by Amazon, the tax will be refunded only if Amazon receives supporting exemption documentation. The supporting document will be made available in your Tax Document Library.
If I issue a refund of taxes on orders I fulfill, will Amazon supply the buyer exemption document?
No. Similar to product refunds, any exemption that is not applied through ATEP at the time of purchase will require a post order refund of tax to support the exemption. Sellers are responsible to obtain, validate, and retain any exemption documentation necessary to support a buyer’s tax only refund request. If you issue any refund prior to obtaining any necessary documentation, you may not be able to obtain the document.
What are the Buyer Exemption Codes on my Sales Tax Report?
The following exemption types are currently supported through ATEP on Amazon.com:
| Buyer Exemption Code | Description |
|---|---|
| LB | Library |
| 501C | 501C |
| NA | Native American |
| AP | Agriculture Production |
| CO | Charitable Organization |
| DIRECT | Direct Pay Permit |
| EDI | Education Institution |
| FG | Federal Government |
| SLG | State/Local Government |
| HO | Hospital (Nonprofit or State) |
| NP | Nonprofit Organization |
| NPR | Nonprofit Religious Organization |
| DP | United Nations/Diplomat |
| RESALE | Resale |
| MPU | Digital Products/Software Exemption |
| IPM | Industrial Production/Manufacturing |
| OT | Other |
| INSUR | Insurance |
| SBE | Small Business Exemption |
The exemption types supported in ATEP are subject to change at any time. By participating in ATEP, you agree to accept both, the Tax Calculation Services Terms, and the tax exemption information, document, or certificates provided by the buyer and made available by Amazon in connection with a buyer’s exempt purchase through ATEP.
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